To solve for the nominal rate of interest compounded monthly given the effective rate of interest, we can use the following formula:
Effective rate = (1 + (nominal rate/m))^m - 1
where m is the number of compounding periods per year.
In this case, the effective rate of interest is 4.5% and the compounding period is monthly, so m = 12.
Substituting these values into the formula, we get:
4.5% = (1 + (nominal rate/12))^12 - 1
Simplifying this equation and solving for the nominal rate, we get:
nominal rate = 12 * [(1 + 4.5%)^(1/12) - 1]
nominal rate ≈ 4.3574%
Therefore, the nominal rate of interest compounded monthly is approximately 4.3574%.